When Assets Are Exchanged at a Loss in an Exchange

question 22

Multiple Choice

When assets are exchanged at a loss in an exchange lacking commercial substance,the basis of the new asset is usually

• A) the list price of the new asset.
• B) the book value of the old asset plus any cash paid on the trade-in.
• C) the fair market value of the new asset.
• D) either the book value of the old asset plus any cash paid on the trade-in or the fair market value of the new asset.

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